FirstRand bank's continuing indecision about whether to fire former transport minister Mac Maharaj or keep him as a member of its board of directors, tells it all: the bank is caught between the proverbial rock and a hard place. To keep him on is as risky as to fire him. Why? Well, apart from the billion or more at stake for the bank, some of its top executives could, in theory a least, face prosecution for corruption.

Why nobody has mentioned this before we cannot imagine.

Let us explain.

The Sunday Times on 16 February revealed that a company controlled by former ANC fundraiser Shabir Shaik -brother to the government's chief arms procurer, Chippy - had secretly made various gifts and payments totalling more than R500 000 to Maharaj and his wife while Maharaj was still minister of transport. They were not listed in the register of members' interests at parliament, as is required by law.

The Sunday Times report went on to point out that, in the period that these gifts and payments were made, his department had awarded two huge contracts: the N3 toll road concession, worth several billion, and the contract to produce the new ID card drivers' licences, worth several hundreds of millions.

Shaik's companies were among the beneficiaries of both contracts. Shaik and Maharaj refused to comment on the story or explain the payments.

In the week following the exposé, FirstRand announced that its board had agreed to a request from Maharaj that he be "allowed" to take leave of absence for three months. FirstRand‘s chief executive, Laurie Dippenaar, explained that this would enable Maharaj "to focus his attention on the allegations against him", and that the bank would "monitor the situation".

At the end of the three months, FirstRand announced that it was instructing its attorneys, Hofmeyr Herbstein and Gihwala (see noses past about them), to investigate the allegations against Maharaj, to assist the board in coming to a decision about what to do. They were supposed to report in two weeks, but at the end of the two weeks - in mid-June - the investigation was extended by two months.

Observers might be excused for thinking that FirstRand is playing for time. But why, you ask? Simple.

The Sunday Times never mentioned it in their fine exposé of the payments from Shaik - but FirstRand is also a member of the N3 Toll Consortium. Compared to the huge sums that FirstRand is making from the toll road deal, any profits Shaik stands to make are small change.

And as for the amounts paid by Shaik into Maharaj's bank accounts - they are of little consequence compared to the large rewards that Maharaj has been getting from FirstRand Bank.

The amount of funding required for the N3 toll road project made it one of the largest, if not the largest, public-private sector transaction ever concluded in South Africa. In total, the project required about R2.1bn in "up-front" finance. R400m of that was share capital; the remaining R1.7bn was borrowed from banks. FirstRand is both a major shareholder and it is the lead banker providing the massive loan package.

Maharaj resigned as minister of transport and left parliament in June 1999 - to immediately join FirstRand as its highest-paid non-executive director ever. (Last year he was paid over Rlm by the bank in director's fees - more than was paid to the banking group's chairman.)

And while most folk know Maharaj works for FirstRand, not that many know that the former director general of the department of transport, Ketso Gordhan, also now works for the bank.

On the face of it, FirstRand‘s employment of Maharaj and Gordhan could constitute a classic example of the corrupt practice known in America as the "swing door". In many states it is unlawful for a public official to accept employment from a contractor with whom he has previously contracted on behalf of the state, at least for a number of years after he leaves public office - simply because it could have the appearance of a reward for favoured treatment.

So, while FirstRand might be wise to consult its lawyers, the general public should not be relying on the objectivity of their report - when it eventually appears.

Bear in mind that, if FirstRand fires Maharaj, it would implicitly be confirming the negative drift of the Sunday Times report. That could prompt a closer examination of the bank‘s own role, particularly if a ‘betrayed" Maharaj and friends should start talking about their dealings in the past. Reinstating him could be just as risky, depending to some extent on what noseweek and the Sunday Times still have up their sleeves. (Horrors! FirstRand might find itself exposed up to its armpits in a self-interested cover-up, before it can complete negotiations for a quiet settlement with Maharaj - and the government.)

Indeed, noseweek is reliably informed that one of the things FirstRand‘s lawyers are still trying to establish is: how much do the newspapers already know - and what might they be able to prove? Back to Shabir Shaik. The Shaik company that paid the money to Maharaj is called Nkobi Holdings - after the ANC's former national treasurer Thomas Nkobi. Shaik assisted Nkobi for years before his death.

As an explanation for the use of the name, Shabir Shaik long claimed that the Nkobi Family Trust was a shareholder in Nkobi Holdings. But when Nkobi's widow tried to establish how the alleged shareholding might benefit her and her family, this claim quickly proved to be false.

Two other possible explanations remained for the choice of name: either it was a "discreet" vehicle for raising funds for ANC luminaries, thereby honouring the memory of the old party treasurer - or Shabir Shaik was fraudulently trying to create that impression for his own personal benefit. The efforts made by former minister of defence Joe Modise to assist Shaik in his original cover-up efforts, Shaik's long-established role as financial advisor and funder to ANC deputy president Jacob Zuma, and now the payments to Maharaj make the former option by far the more likely.

Already in November 2001 the Mail& Guardian reported: "There has been speculation, but no proof, that elements in the ANC benefited financially . . . through companies - particularly empowerment companies - involved in winning bids."

If true, where does that place FirstRand in the overall scheme of things? Well, for a start, in a good position to negotiate in a quiet and amicable settlement to the Maharaj fiasco with the government.

In view of the amount of money involved, it might even be able to rely on the Reserve Bank for support.

When noseweek visited Kobitech's offices in Springfield Park, near Durban, we found the place all but deserted. What's up?

In a press interview some years back, Shaik declared that one of his key aims was "to make a sizeable contribution to job creation by facilitating ownership and skills transfer to historically disadvantaged communities."

We found only three employees at Kobitech's offices. One is a receptionist; the other "historically disadvantaged" folk are Heeran Maharaj - Mac's favourite nephew - and Silvendran Raju, brother-in-law of commissioner for inland revenue, Pravin Gordhan.

The former MD of Kobitech Transport Services, Sabeer Sheik Mohammed, is said to be taking legal action against the company for R525,000 he is allegedly owed in outstanding salary payments and expenses.

He is one of at least half-a-dozen senior staff members who have quit the company in the last few months. None is talking to the press, as they still hope to be paid the salaries they are owed.

Most people would figure that Shaik, who has a stake in contracts worth billions of tax rands, would be well-heeled. But the picture that is now emerging is more complicated.

The fact that, in order to obtain finance for so many of his projects, Shabir had to sign away his dividends to his financiers, might explain the odd cash squeeze.

Might some strain also be attributed to Shabir's playboy lifestyle? He has just bought a R4.6m mansion on Durban's swish Innes Road. It previously belonged to playboy Tony Giorgio, millionaire sexshop chain owner who committed suicide when his considerable earnings simply could not keep up with his even more considerable spendings.

Shaik did not reply to e-mailed questions about his finances. Calls to the switchboard at Nkobi Holdings were not answered.

With acknowledgement to Noseweek.